2017 Shareholder Review

HT&E LIMITED ABN 95 008 637 643 In May 2017, APN News & Media Limited changed its name to HT&E Limited (HT&E), marking the Company’s final shift away from traditional publishing and reflecting HT&E’s repositioned portfolio of leading, high-quality metropolitan media assets across radio, outdoor and digital.

Uniquely placed, HT&E continues to operate in growth segments of the media landscape and brings together a combination of ‘away from home’ assets – Australian Radio Network (ARN), Adshel, Conversant Media, Gfinity Esports Australia (Gfinity Australia) and Emotive. These powerful channels can work together to more effectively target, engage with, and drive behaviours of our consumer audiences while they’re on the move. HT&E’s media and entertainment offering provides unprecedented scale, content creation, and insight-led innovation, to deliver a better proposition for audiences and advertisers.

In this report

About HT&E 1 Chairman’s Report 2 Chief Executive Officer’s Report 4 Operating and Financial Review 6 Corporate Social Responsibility 14 Senior Management Team 18 Board of Directors 20 Five Year Financial History 22 Corporate Directory 23 HT&E owns Australia’s #1 national metropolitan radio network and the #1 street furniture business in Australia and New Zealand.

Results snapshot

In 2017, HT&E continued to focus on its core assets, supported by its expanding digital portfolio and data capabilities, and a fresh trade proposition to deliver #1 integrated solutions for advertisers. National Radio Network ARN improved its performance in the second half of the year, regaining the number one network position, growing market share and improving its digital broadcast 0.97x and commercialisation capabilities. Adshel continues to lead the way in street furniture Net debt to EBITDA is down from 1.2 times in 2016 to digitisation and innovation, renewing existing contracts 0.97 times in 2017 and securing the new Metro Trains Melbourne contract for seven years, while also enhancing its data and smart cities leadership position. The integration of Conversant Media and ARN is 7cps progressing well, leveraging digital opportunities and Dividends paid during 2017 incremental revenue across the Group. A further 4 cents per share has been declared and will HT&E also announced its entry into the global growth be paid in April 2018 sector of esports with the launch of Gfinity Australia, enabling HT&E to further expand its digital audience base and diversify revenues. 2 HT&E LIMITED SHAREHOLDER REVIEW 2017

I cannot emphasise how important it is to be operating in strong and growing sectors, at a time Chairman’s when there is significant disruption to the media industry, where social media and search companies Report are dominating advertising spend and where new challenges are presented every day. There is no doubt that radio and outdoor assets provide significant opportunities as they continue to grow audiences and remain attractive to advertisers. The transformation of the Company was signalled by our name change in May, to HT&E. For the first time, a media company in Australia brought together the ‘away from home’ channels of radio, outdoor and digital – enabling advertisers to better engage, influence and drive audience behaviour as we connect and interact with them, wherever they are. Focus Our overarching strategic focus is unchanged, and is centred on our four objectives – to grow our audience base, diversify revenues, expand digital and data capabilities, and optimise integration – all while delivering acceptable, long-term returns to shareholders. It was a new beginning for HT&E in 2017, as In 2017, despite some strong progress in many for the first time we areas, the financial performance of our businesses was not as strong as we would have liked, and I operated our core can assure you that the Board is committed to radio and outdoor delivering improved results and superior returns assets as 100 per cent for shareholders. We have set the focus for the owned businesses. Company for 2018 and beyond, and have a highly experienced management team. Operating in growth sectors 2017 was a big year for the media industry with historic changes to Australia’s media laws passed by Federal Parliament in September, delivering the largest reforms in nearly three decades. We welcome the reforms, in particular the removal of broadcasting licence fees. The media segments we are in give us great confidence. Radio has demonstrated long-term growth in both listenership and revenue and we are confident that will continue. The sector is successfully developing new infrastructure and technologies to further its business model into the future, and the industry continues to work closely together for the benefit of its listeners and advertisers. There is no doubt that out-of-home, and street furniture in particular, is the segment to be excited about, because of its significant growth potential. As digitisation increases and data capabilities improve, advertisers will benefit from more flexibility and innovation. 3

HT&E is in attractive sectors which we selected for their growth potential. We have a strong balance sheet and the experience and ability in the management team to execute our strategy.

The out-of-home market does have a number of The year ahead significant contracts that are extremely attractive The Board believes HT&E is well positioned with because of their scale and longevity. While we are its current businesses. 2018 is all about delivery keen to grow, we expect our management to be and operational focus, driving EBITDA, with good disciplined when it comes to submitting tenders capital management, which will in turn yield better for these major contracts, which must always shareholder value. be assessed on a commercial basis. We assess every contract we compete for and evaluate HT&E is in attractive sectors which we selected any alternative uses for capital, the business key for their growth potential. We have a strong performance indicators (KPIs), and standards that balance sheet and the experience and ability in we want to meet. We are mindful that winning the management team to execute our strategy. uncommercial contracts does not deliver value We will consider opportunities, and “bolt ons”, to for shareholders. our radio, outdoor and digital offering, providing Australian Taxation Office dispute they align with our four objectives and deliver HT&E continues to be involved in discussions acceptable returns. with the Australian Taxation Office pertaining to On behalf of the Board, I would like to thank our the New Zealand Branch matter, as previously shareholders for their ongoing support and all disclosed. Amended assessments were received HT&E employees for their commitment and work in late January 2018. The Company intends to fully for the Company. pursue this matter, and we remain confident in our position. Final resolution of this matter could take several years. Payment of dividend Dividends were reinstated in 2017, with seven cents per share paid during the year. Our dividend Peter Cosgrove policy has a payout ratio of 40-60 per cent of Chairman underlying NPATA when leverage is less than 2.0 times EBITDA and, accordingly, in February 2018 the Board declared a fully franked final dividend of 4 cents per share. Our balance sheet position is strong, with net debt less than 1 times EBITDA at 31 December 2017. 4 HT&E LIMITED SHAREHOLDER REVIEW 2017

by $2.3 million, with the EBITDA margin contracting slightly to 38 per cent. The EBITDA decline of Chief $6.7 million in the first half was offset by strong second half growth of $4.4 million. Executive The business is determined to extend its ratings lead in 2018, launching new breakfast shows on KIIS 101.1 and GOLD104.3 in Melbourne, a new breakfast show Officer’s for 96FM in Perth, and a new national Drive show across the KIIS network, bringing fresh energy and commercial opportunities to the network. They will Report join our established on-air stars across the network to drive further ratings and deliver better value for clients. While ARN remains focused on strengthening its core broadcasting brands, significant progress has been made future-proofing the business by creating the future of audio entertainment in Australia. With an unrivalled multiplatform strategy, ARN has a broadcasting, digital and social model that is growing existing and new audiences, commercialising this multiplatform content and developing new revenue opportunities and integrated solutions for advertisers. Adshel Adshel had a strong financial year in 2017 in both HT&E is uniquely placed in the Australia and New Zealand, with overall revenue up media market with an expanding 7.5 per cent and EBITDA up 11.3 per cent. portfolio of leading, high-quality New Zealand performed particularly well, with revenue metropolitan assets across up 24.8 per cent and EBITDA up 24.1 per cent, while radio, outdoor and digital. in Australia, the loss of the Yarra Trams contract, announced in October, began to impact performance Each of our business units in quarter four. Despite this setback, revenue and operates in sectors of the EBITDA growth for the year was 4.9 per cent and market that continue to grow 7.6 per cent respectively. and each is focused on the The business is actively pursuing new contracts as it optimisation of its performance. continues to demonstrate its leading street furniture model by delivering exceptional revenue performance with world-class innovation and customer service Our powerful assets work together to connect initiatives. We were particularly pleased to secure the with audiences on the move, and better Metro Trains Melbourne contract for seven years, influence consumer behaviour with greater strengthening Adshel’s coverage across the rail targeting capabilities. commuting audience in Melbourne. Our businesses Adshel’s digital roll-out continued, albeit impacted in Australian Radio Network (ARN) Australia by the Yarra Trams contract process and Regaining and retaining the number one outcome. In New Zealand, expansion continued with metropolitan network position was a key priority for the network growing to more than 200 screens. Plans our radio business in 2017. The actions successfully are in place to redeploy screens impacted by the Yarra implemented resulted in the KIIS and Pure Gold Trams contract outcome across the Adshel network in brands taking out the number one position from the first half of 2018. August, ending the year as the leading network in Adshel further improved its data and programmatic the country with the highest network ratings in the capabilities to automate its sales processes and history of ARN. Momentum has returned. expand its geo-targeting capabilities. Although revenues for the year were down Adshel remains the number one street furniture $1.4 million (0.6 per cent), the second half revenue network in Australia and New Zealand, with a performance reflected the improved ratings, and superior digital model that allows for better audience delivered market share gains due to revenue growth intelligence and campaign performance. As the of 5.1 per cent, compared to market growth of outdoor sector continues to grow at a steady rate, 1.7 per cent. Adshel will continually assess new opportunities in Costs for the year were up $0.9 million, assisted the market. by the licence fee cuts. Overall, EBITDA was down 5

Digital investments On a pro-forma basis, revenue from continuing In 2017, HT&E expanded its portfolio of digital operations in 2017 would have been up 3 per cent, from investments to support its core offering. We $459.2 million. EBITDA from continuing operations and established HT&E Events and Gfinity Australia before exceptional items would have been up 1 per cent in August, focusing on the phenomenally strong from $117.8 million on a pro-forma basis in 2016. growth area of esports and bringing a unique While these results were below our expectations, competitive framework to the Australian market. the restructuring program implemented since the Partnering with global experts in the industry, our end of 2015 is now complete, and actions taken to esports division provides further opportunities for deliver stronger operational performance in 2017 HT&E to expand its digital audience base and grow will continue in 2018. commercial opportunities by reaching a valuable, younger demographic. Marketing in motion In 2017, HT&E undertook industry-leading research Conversant Media revenue in 2017 was flat year on to prove our ‘Marketing in Motion’ proposition, year, although this was a sound result in the context demonstrating how radio, outdoor and digital work of a challenging digital display market. 2017 was a effectively together and provide better return on record year for audience metrics, with all brands investment for advertisers. Clients can now leverage experiencing growth and seven consecutive months our unique portfolio of media assets to develop of record traffic month on month for Australian integrated solutions, with content replicated and unique visitors across Conversant Media sites. Sports aligned across our divisions. opinion website, The Roar, had an exceptional year including the launch of Club Roar, which has had over 2018 Focus 28 million video views to date. In 2018, our focus is on delivering value The integration of Conversant Media and ARN’s digital for shareholders by driving and delivering sales teams was successfully completed in 2017. As operational performance. well as additional revenue opportunities, it improves For radio, that means maintaining our number ARN’s digital offering, presenting content and one position, improving market share and audience growth opportunities. profitability, and digital growth. Adshel is focused HT&E’s other digital investments continue to perform on driving continued growth and expanding its well. Emotive had a successful year, with earnings digital network, pursuing new and existing contract up 24 per cent in 2017, positioning itself as one of opportunities, and deploying new technology and geo- the leading and award-winning social video content targeting capabilities. agencies in the country. For HT&E Events, our ambition is to establish and The Company has also invested a modest amount commercialise Gfinity Australia and the Elite Series in Unbound, an early stage media content and tournament as the premier esports broadcast league technology business, focused on virtual and in the country. augmented reality. Thank you Hong Kong outdoor (Cody) I would like to sincerely thank our staff at HT&E for Cody made some progress in returning to profitability their contribution to the Group as they continue in 2017, despite continuing challenging market to demonstrate commitment to the business, with conditions. We secured the Hong Kong Tramways skill and passion. Their flexibility, innovation and five-year shelter contract from May, the onerous loyalty are integral to what has been achieved and I Buzplay contract expired in mid-2017 and other commend them for supporting the changes we made unprofitable contracts were exited. As a result, in 2017 and embracing the opportunities that now Cody has commenced 2018 on a stronger footing, present themselves. and the first quarter has started well, from a revenue I would like to thank our shareholders for their perspective. We will maintain a rigorous focus on ongoing support. I look forward to working with you management and costs to continue improving as we focus on driving operational performance and performance in 2018. delivering value to shareholders in 2018. In August 2017, HT&E commenced a strategic review of the Cody business. After a detailed review, the Board has determined that HT&E will continue to operate the Cody business and focus on returning it to profitability for the benefit of shareholders. 2017 Financial results Ciaran Davis 2017 statutory revenue from continuing operations Chief Executive Officer (CEO) was up 58 per cent to $472.3 million, with EBITDA from & Managing Director continuing operations up 30 per cent to $118.4 million. HT&E’s statutory results were materially impacted by the full year ownership of Adshel. 6 HT&E LIMITED SHAREHOLDER REVIEW 2017

contract announced in October, and specifically the assumptions regarding the potential network Operating impact, have resulted in an impairment of Adshel goodwill and intangibles of $163 million in the 2017 & Financial accounts. Statutory Net Profit After Tax (NPAT) attributable to shareholders for the year was therefore a loss of $117.5 million, compared to Review a loss of $6 million in 2016. If HT&E had owned 100 per cent of Adshel and This Operating Performance overview Conversant Media for the full year in 2016, revenue and Financial HT&E Limited (HT&E) results for 2017 were impacted from continuing operations in 2017 would have Review should by the acquisitions of Adshel and Conversant Media been up 3 per cent, from $459.2 million. EBITDA be read in in October 2016. Statutory results for 2017 versus from continuing operations and before exceptional conjunction with 2016 benefit from 12 months of full consolidation items would have been up 1 per cent from the Chairman’s of both businesses, compared with just over two $117.8 million on a pro-forma basis in 2016. Report and the months in 2016 (and in Adshel’s case, 10 months as Chief Executive an associate). To enable comparability, this overview Following significant restructuring in 2016, our Officer’s Report. discusses both statutory and pro-forma results focus in 2017 was on our core assets of radio and against performance for 2016. outdoor, integrating the acquisitions and achieving operational improvements in Australian Radio On a statutory basis, segment revenue from Network over the second half 2016 result. continuing operations was up 58 per cent to $472.3 million from $298.6 million. $160.6 million After challenging ratings and revenue in the first is directly attributable to the acquisitions, with half, ARN regained its number one national network the balance predominantly due to growth across rating in survey 5 and held it for the rest of the Adshel, offset by declines at ARN, particularly in the year. The survey 8 result means ARN was the first half. Segment costs were up 62 per cent to number one national network for the year. Revenue $362.5 million from $224.1 million; $126.3 million performance started to reflect improved ratings was acquisition related, and the balance was from August, and for the second half revenue driven by investment in staff, talent and platforms growth was 5.1 per cent, compared to market across the business, offset by savings – including growth of 1.7 per cent. Over the full year, ARN $4.4 million of benefits due to the 2017 licence revenue was down less than 1 per cent, with growth fee removal – at radio. Segment earnings before in the second half offsetting a 6 per cent decline interest, tax, depreciation and amortisation (EBITDA) in the first half. Second half costs in ARN were up from continuing operations and before exceptional 2 per cent and have been assisted by the licence fee items was up 30 per cent from the corresponding cuts finalised in October. This resulted in full year period to $118.4 million. costs up less than 1 per cent. As a result, EBITDA was down by $2.3 million for the year. Depreciation increased from $7.4 million to $23.2 million in 2017; $11 million of this increase Adshel led the market in the first half of 2017, and was “acquired” with the balance of the uplift was on track to beat market expectations until it due to the recent capital expenditure program, lost the Yarra Trams tender, announced in October. particularly in Adshel. As a result, segment earnings Significant progress has been made since then before interest, tax and amortisation (EBITA) from to replace inventory in central Melbourne, and continuing operations and before exceptional items redeploy the Yarra Trams digital screens across was up nearly 15 per cent from the corresponding Australia and New Zealand. Despite this setback, period to $96 million. Net interest expense declined revenue and EBITDA growth was achieved in 2017. on lower debt levels, while tax expense increased in Adshel New Zealand delivered stellar results, line with the earnings uplift. with revenue up 24.8 per cent and EBITDA up 24.1 per cent. In Australia, full year revenue was Net Profit After Tax attributable to shareholders up 4.9 per cent and EBITDA was up 7.6 per cent. from continuing operations and before Amortisation and exceptional items (NPATA) was up 28 per cent The table on page 7 reconciles the Group’s to $54.1 million, compared to $42.4 million in segment result before exceptional items to 2016. Amortisation increased from $1.1 million to the statutory result. Exceptional items in 2017 $16 million, related to the amortisation of Adshel’s included a mix of one-off gains and non-recurring identifiable intangible assets which commenced costs arising during the year, including the during 2017 following the 2016 acquisition and one-off $5.4 million benefit from the radio the $222 million accounting value uplift recorded licence fee holiday relating to ARN’s 2016 results, in the 2016 results. The loss of the Yarra Trams offset by the Adshel impairment change and 7

Financial performance Segment result Exceptional items3 Statutory result AUD million4 2017 2016 2017 2016 2017 2016 Revenue 472.3 298.6 – – 472.3 298.6 Other income 7.4 7.2 – 223.5 7.4 230.7 Share of profits of associates 1.3 9.3 – – 1.3 9.3 Costs (362.5) (224.1) (158.8) (5.9) (521.4) (230.0) EBITDA1 118.4 90.9 (158.8) 217.6 (40.4) 308.6 Depreciation (22.4) (7.4) (0.8) – (23.2) (7.4) EBITA 2 96.0 83.5 (159.7) 217.6 (63.7) 301.1 Net interest expense (9.0) (17.7) – (0.4) (9.0) (18.0) Net profit before tax and amortisation 87.0 65.9 (159.7) 217.2 (72.6) 283.1 Tax expense (26.7) (16.9) (0.4) (13.7) (27.1) (30.6) Net profit after tax and before amortisation 60.3 48.9 (160.0) 203.5 (99.7) 252.5 Profit attributable to non-controlling interests (6.2) (6.6) (0.3) – (6.6) (6.6) NPATA attributable to HT&E shareholders 54.1 42.4 (160.4) 203.5 (106.3) 245.9 Amortisation (net of tax) (11.2) (0.8) – – (11.2) (0.8) NPAT attributable to HT&E shareholders from continuing operations 42.9 41.6 (160.4) 203.5 (117.5) 245.1 Profit/(loss) from discontinued operations – 21.1 – (272.2) – (251.1) NPAT attributable to HT&E shareholders 42.9 62.7 (160.4) (68.7) (117.5) (6.0)

(1) Earnings before some restructuring charges incurred by ARN to the ATO while these dispute processes are being interest, tax, depreciation and address its first half challenges. Further details completed. Final resolution of this matter could amortisation are included in note 1.3 to the consolidated take several years. (EBITDA) from financial statements. continuing HT&E’s net debt at the end of 2017 was operations and before exceptional Balance sheet and cash flow $114.8 million, down from $142.7 million in items, represents 2016. The balance sheet is very strong, with the Group’s total The Group had net assets at 31 December 2017 of segment result. $622.7 million. The parent entity’s interest in the net net debt leverage of 0.97 times and interest (2) Earnings before assets decreased by $124 million during the year. cover of 15 times. The Group retains more than interest, tax and amortisation (EBITA) $220 million in undrawn facilities, sufficient to from continuing In 2016, Accounting Standards required HT&E cover any outcome on the dispute with the operations and to uplift the value of Adshel in the balance sheet before exceptional ATO. Including the ATO deposit, leverage at items. by $222 million. During 2017, HT&E finalised 31 December 2017 would have been 1.4 times. (3) Refer to note 1.3 to the Adshel acquisition accounting, recording the consolidated $382.5 million in goodwill, $134.0 million in Operating cash flow was $75 million in 2017, up financial statements 109 per cent on the statutory 2016 result. While for further details identifiable intangible assets and an associated in relation to deferred tax liability of $51 million. The loss of the the Company benefited from a full year of Adshel exceptional items. Yarra Trams contract announced in October, and cash flow, $15 million of non-recurring cash (4) Totals may not add due to rounding. specifically the assumptions regarding the potential outflows contained the overall result. Dividends network impact, have resulted in an impairment of were also reinstated in 2017, with $18 million paid Adshel goodwill and intangibles of $163 million in to shareholders. $16 million was spent on capital the 2017 accounts. expenditure in 2017, compared to $15 million in 2016. While lower than expected due to the As announced to the Australian Securities Exchange timing of contract renewals, capital expenditure on 23 January 2018, HT&E received amended was predominantly in Adshel where network asset assessments from the Australian Taxation Office deployment and digitisation continued. HT&E’s (ATO) pertaining to the matter disclosed in the 2016 plans suggest that, subject to the timing of contract Annual Report. The Company has not accrued renewals, capital expenditure of approximately any amount in relation to the dispute in the 2017 $30 to 40 million may be incurred in 2018. balance sheet. HT&E remains satisfied that its treatment of this matter is consistent with relevant A final dividend of 4 cents per share was declared taxation legislation. HT&E intends to lodge an for 2017 and is payable in April 2018. objection with the ATO and if necessary contest the amended assessments through litigation proceedings. $51 million will be deposited with 8 HT&E LIMITED SHAREHOLDER REVIEW 2017

Operating & Financial Review

Strong ratings to propel ARN into 2018 Australian Under the leadership of CEO Rob Atkinson, appointed in April 2017, actions were taken to address the challenging period of ratings and Radio revenue ARN experienced from mid-2016 to mid-2017. A new Chief Commercial Officer was also Network appointed earlier in the 2017 year. Ratings improved in the second half of 2017, and ARN is the #1 national radio ARN regained the number one national 10+ network network in Australia, with the position in surveys 5 to 8. ARN ended the year as country’s leading on-air talent the leading national radio network in Australia, with strong survey 8 results across all markets to cap off and a re-energised content ARN’s best ratings year yet. strategy in 2018. In Sydney, ARN held the number one and number two FM stations, as well as the number one and number two FM breakfast shows. KIIS 1065’s Kyle & Jackie O and WSFM’s Jonesy & Amanda achieved outstanding results, with a 12.1 per cent and 10 per cent share respectively. In Melbourne, ARN rounded out a strong year with GOLD104.3 retaining its position as number one FM station, while KIIS 101.1 was the number five Performance improving in the second half of 2017 FM station. ARN is focused on delivering audience After challenging ratings in the first half of 2017, growth in the Melbourne market in 2018. Australian Radio Network’s revenue performance After launching a new 97.3FM breakfast show in began to reflect improved ratings from August, Brisbane in early 2017, the station ended the year with second half revenue growth of 5.1 per cent, as number four FM breakfast and number three versus market growth of 1.7 per cent. Second station overall. 4KQ retained its position as number half costs were up 1.8 per cent, assisted by the one AM station overall, and number one AM removal of broadcasting licence fees, driven by commercial breakfast. increased variable cost of sales on increased revenue and investment in staff and talent. ARN Mix102.3 maintained its lead in Adelaide, finishing full year revenues were down 0.6 per cent year the year as the number one station overall with an on year, with growth in the second half offsetting increased share of 12.3 per cent, and the number a 6.1 per cent decline in the first half. Full year one FM breakfast show. costs were up 0.7 per cent. As a result, EBITDA In Perth, the refocused music positioning yielded was down by $2.3 million for the year. The EBITDA strong audience growth for 96FM, finishing the year margin was 38 per cent. with a 10.2 per cent share, providing a solid platform The Australian radio market continues to show for 2018. resilience, up 0.1 per cent in 2017. The sector Australia’s leading on-air talent has demonstrated long-term growth in both In 2017, ARN re-signed WSFM’s Jonesy & Amanda, listenership and revenue, and live Australian radio securing the reputable and talented breakfast duo remains the dominant audio platform, accounting until the end of 2020. for 65.3 per cent of time spent listening to audio, up from 64.9 per cent in 20161. ARN has Australia’s leading on-air personalities, with key talent locked in for at least the next three years 2 AUD million 2017 2016 across the KIIS and Pure Gold networks. Strategic Revenue 218.7 220.1 content changes announced since November, Costs (135.6) (134.7) backed by a significant investment in targeted Segment EBITDA 83.1 85.4 marketing, will solidify ARN’s leadership position and Depreciation (4.1) (3.8) enable market share and ratings growth in 2018. EBITA 79.0 81.7 In Melbourne, ARN has launched a new breakfast show on KIIS 101.1. Jase & PJ have an established on-air history and bring a fresh, youthful energy to the station, with stronger commercial appeal. 1. 2017 GfK Share of Audio study, Commercial Radio Australia. ARN has also launched a new national Drive show, 2. Results before intercompany eliminations. Refer to note 1.3 to the consolidated financial statements for further details. Totals may not add due to rounding. 9

Will & Woody, across the KIIS network, driving Android Auto and Google Home. iHeartRadio’s greater appeal for national advertisers. Both integration into these new, voice-activated, teams are commercially focused with established consumer audio products, and the local exit chemistry, and understand radio audiences and of Pandora, drove an increase in the usage of how audio content translates to digital and social iHeartRadio in the second half of the year. environments, which is a key focus for ARN in 2018. The integration of Conversant Media with ARN’s ARN also made changes to GOLD104.3 in digital sales team in 2017 enabled the business Melbourne, securing one of the strongest radio to pursue additional revenue opportunities, while talents in the world, with Christian O’Connell, strengthening the Group’s overall digital presence London’s leading breakfast show host, joining and increasing exposure to the high growth areas the line-up. of video and mobile. In Perth, having made format changes in early Energising brands in 2018 2017, ARN launched a new breakfast show with In 2018, ARN is repositioning its sales efforts with a Paul & Lise – well-recognised talent in the market new trade proposition around ‘Energising Brands’. who will contribute even further to the station’s The new position encompasses a comprehensive improving performance. commercial strategy based on ideas and insights, The future of audio entertainment backed by increased investment in research and data to support ARN’s ambition to be the partner Beyond its FM broadcast offering, ARN continues of choice for solutions across audio and digital. to make targeted investments to grow digital This all-of-business proposition has a focus on both audiences and drive new revenue opportunities as content and commercial, driving a re-energised and a multiplatform business, with a renewed vision to even more competitive ARN in 2018. create the future of audio entertainment. iHeartRadio, the music streaming and digital entertainment brand, is a key component in ARN’s digital future and a driver of audio content. Relaunched in January 2017, the iHeartRadio app has now surpassed 1.52 million downloads and over one million registered users, and generates over three million hours of listening per month. In addition to the custom radio and artist radio offering, with 10 new stations added in 2017, new capabilities introduced in 2017 are changing the dynamics of iHeartRadio, broadening ARN’s audience and revenue streams. ARN was the first Australian radio broadcaster to offer AdsWizz dynamic ad insertion. Partnerships with Whooshkaa, Spreaker and others have created the biggest library of podcasts in the country, with over 1.4 million episodes that will be able to be commercialised. The iHeartRadio app is also being integrated into voice-activated products to accelerate the platform’s availability across a range of devices, including Apple CarPlay, ARN continues to make targeted investments to grow digital audiences and drive new revenue opportunities as a multiplatform business, with a renewed vision to create the future of audio entertainment. In 2017, ARN re-signed WSFM’s Jonesy & Amanda. 10 HT&E LIMITED SHAREHOLDER REVIEW 2017

Operating & Financial Review

While data from the Outdoor Media Association showed the Roadside-Other market segment Adshel in Australia was up 3 per cent on 2016, Adshel was ahead with full year revenue growth of Adshel is the #1 street furniture 4.2 per cent. In New Zealand, Adshel revenues network in Australia and New grew 24 per cent, against the market growth of Zealand, with a superior digital 18 per cent. model that allows for better The outdoor sector remains strong, and advertiser audience intelligence and appetite is expected to continue to grow, campaign performance, delivering particularly in the street furniture segment, driven targeted, high-frequency by increased digitisation. campaigns at scale. Digital revenues account for over 30 per cent of Adshel’s media revenue. The network will expand in the first half of 2018 to over 300 screens in Leading street furniture and rail networks New Zealand, while street furniture deployment With premium assets across street furniture, rail and the Metro Trains Melbourne project will and petro-convenience, Adshel is embedded see Adshel grow to more than 750 screens in in a crucial part of consumers’ lives – the daily Australia. Ongoing investments in digitisation, data commute. As the leading street level, small format and technology are all key drivers of future growth. network, it offers scale and a level of engagement not replicated in any other out-of-home media. At the same time, Classic (static) products remain Its street furniture and commuter media formats resilient, making Adshel an outlier in the industry are uniquely at the intersection of technology in this regard, with like for like inventory-adjusted developments in data, mobile and smart cities, sales growth of 1.8 per cent in 2017, supported by enabling advertisers to more effectively and continued investment in research and marketing. efficiently target consumers than has previously Second half outcomes affected momentum been the case in out-of-home. into 2018 Adshel boasts the largest roadside network in Adshel had a very strong performance across Australia and New Zealand. The Adshel Live Australia and New Zealand in the first half of 2017, network continues as the only national digital with significant revenue and earnings growth. street furniture network in each of Australia The impact of the Yarra Trams contract outcome, and New Zealand and attracts advertisers with announced in October, affected momentum in its flexibility, immediacy, interactive nature and quarter four. Despite this setback, total revenue geo-targeting capabilities, offering broadcast scale for 2017 across both markets was up more with narrowcast targeting. than 7.5 per cent to $221.3 million. EBITDA grew 11.3 per cent to $51.5 million, with digital revenues In 2017, Adshel’s innovation was recognised contributing to margin improvement, largely driven by the industry, winning awards including the by the performance in the first half. Outdoor Media Association’s Creative Collection Grand Prix and Best Digitally Led Marketing Digital investment metrics remained strong across Campaign at the AMY Awards. Adshel NZ was both markets with capital investments yielding awarded the prestigious CAANZ Beacon NZ a less than two-year pay-back, despite some Media Business of the Year. yield pressure on digital advertising revenue, in line with recent industry trends. Total costs Investment in digital driving revenues grew 6.4 per cent to $169.8 million with much The Adshel Live roll-out continued during 2017, albeit of this increase coming from revenue-related impacted in Australia by the Yarra Trams contract selling costs, predominantly site rent, agency process and outcome. In New Zealand, expansion commissions and cost of goods on increased bus continued with the network growing to more than shelter sales. 200 screens, including entry into Hamilton. 11

Adshel AUD million1 2017 2016 Adshel and ARN partnership opportunities maintains Revenue 221.3 205.8 In 2017, Adshel worked closely with ARN and its focus on Costs (169.8) (159.6) Conversant Media to pursue Group campaign and EBITDA 51.5 46.2 partnership opportunities, allowing advertisers geo-location to run cross-platform campaigns across Adshel Depreciation (17.6) (14.3) and ARN simultaneously. With sight and sound enabled EBITA 33.9 31.9 street working together, campaigns were amplified across channels. furniture Key contracts to set the business up for and rail. commercial success Focus on data and innovation in 2018 Adshel remains the clear leader in street furniture Adshel maintains a strong focus on geo-location in Australia. In re-establishing the Adshel Live data to leverage mobile and deliver rich insights for network in Melbourne across other contracts, more effective campaigns across its superior Classic, Adshel continues to demonstrate the strength Live and Rail networks. of its national network and clarity of approach. It In May, the business announced an exclusive Data continued to retain and win strategic mid-tier and Management Platform partnership with global other key contracts in 2017, including the Metro ad tech giant Lotame, to bolster its geo-targeting Trains Melbourne (MTM) contract which was capabilities and aggregated audience insights. A secured for seven years. new partnership with Roy Morgan has also allowed From 1 April 2018, Adshel will add MTM’s 15 rail advertisers to more precisely target locations where lines and 218 stations in Melbourne to its existing commuters work and shop. In 2018, Adshel will rail offering across Sydney Trains, creating a single continue to invest in data, moving towards selling network to connect advertisers with commuters advertising based on these valuable audience in both of Australia’s largest cities, reaching over profiles, rather than reach and frequency alone. two million commuters each day. The partnership In 2017, the business also moved to automate its will see Adshel deploy a new estate of over 150 buy-sell workflow, with an APAC-first partnership digital screens at key Melbourne CBD and inner-city with Rubicon Project to enable media buyers to railway stations, bringing a host of new scalable purchase Adshel with the precision achieved with digital features to market and extending Adshel’s online advertising. leadership in commuter media. Setting the focus for Adshel, with data, automation Adshel will continue to enhance its smart cities in sales and creative innovation at the core, is capabilities, having leapt forward in this space in repositioning the business for further growth. 2017, including securing the exclusive partnership Adshel will strengthen its position in 2018 by with US-based CIVIQ Smartscapes, which will continuing its Adshel Live expansion, pursuing allow Adshel to offer value and a clear point of new and existing contracts, investing in greater difference with world-class solutions for cities and data capabilities and enhancing its smart transport authorities. cities proposition.

Adshel is embedded in a critical part of consumers’ lives – the daily commute.

1. Results before intercompany eliminations. Refer to note 1.3 to the consolidated financial statements for further details. Totals may not add due to rounding. 12 HT&E LIMITED SHAREHOLDER REVIEW 2017

Operating & Financial Review Digital Investments

In 2017, HT&E continued to build its portfolio of digital investments that support its core radio and outdoor offering and align with its strategy to diversify revenues and grow its audience base.

There were several key developments across are partnering with HOYTS Group to build the HT&E’s digital investments in 2017. most technologically-advanced, dedicated esports arena in 2018. HT&E Events In August, HT&E announced the establishment Gfinity Australia strongly supports HT&E’s strategic of a new division and brand, HT&E Events. It is a objectives to diversify revenues, grow audience joint venture with IKON Media & Entertainment – and expand digital capabilities, with the potential a global media, entertainment and sports agency, to reach a younger audience base and drive with specialist expertise in establishing city-based growth for HT&E. The business is being led by franchise leagues. newly appointed CEO Dominic Remond, formerly the General Manager of the Sydney Sixers with HT&E Events enhances the complementary nature Cricket NSW. of the Company’s existing radio, outdoor and digital businesses by providing unique content Conversant Media that is targeted to HT&E audiences and is highly Conversant Media (Conversant) is HT&E’s pure play relevant and appealing for advertisers. digital business focused on video, mobile and native content creation. HT&E Events will manage niche events for Australian audiences, providing a new inventory of 2017 was a year of strong audience growth across creative and engaging opportunities for brands to all key brands and metrics, with overall video views connect with consumers. up 298 per cent, seven consecutive months of record traffic month on month for unique Australian Gfinity Australia visitors across Conversant sites, and substantial In August, HT&E Events formed an Australian year-on-year growth in average Australian monthly esports business, Gfinity Australia, in partnership users across the network of sites per month – up with a global leader in esports, Gfinity PLC. 51 per cent on 2016. Esports is now reaching mass market scale, with Conversant’s revenue performance in 2017 was an estimated global audience of 385 million commendable in a soft market for digital display people in 2017, and the global market projected to inventory. To counter this, Conversant pursued 1 reach US$1.5 billion by 2020. new, premium-yield video product opportunities, In 2018, Gfinity Australia is launching Australia’s including the launch of Club Roar, a market-first first city-based, professional esports franchise platform for fan-powered video content. In eight league, the Elite Series. Providing a clear and months, over 5,000 videos were submitted and structured top-to-bottom competitive framework were viewed 28 million times. Revenue and EBITDA within Australian esports, for both amateurs were $4.2 million and $0.3 million respectively, and professionals, this is a unique offering in after $320,000 in Club Roar launch costs. the Australian market, strongly desired by the The Roar also launched the associated Club Roar passionate gaming community. Awards, boosting its user-generated content and Gfinity Australia is already attracting commercial enabling brands to integrate with grassroots sports. interest and support, with Alienware, a subsidiary HT&E completed the integration of Conversant of Dell, secured as the Presenting Partner for the and ARN’s digital sales teams in 2017, leveraging 2018 Elite Series, while HT&E and Gfinity Australia the opportunity to bundle content, monetise the

1. Newzoo Free 2017 Global Esports Market Report. 2. Emotive 2017 campaign data and Locowise Q1 2017 State of Facebook video study. 13

Hong Kong Outdoor

In 2017, revenue for HT&E’s Hong Kong outdoor business was down 4 per cent in local currency to $25.2 million, as challenging economic conditions continued to prevail. Costs were down 11 per cent in local currency, with the business having Gfinity Australia combined digital assets and audience of over is focused on been restructured and resized the growth four million unique visitors, respond to briefs during 2016. area of esports; through a single touchpoint, and share expertise Conversant The challenging Buzplay contract, Media is bringing across businesses. its expertise to which had a detrimental impact on leverage digital Emotive earnings for five years, expired in opportunities across the Group. Emotive performance was consistent year on June 2017. This, along with Cody’s year. Gross margin improved from 57 per cent to program to pursue strategic 65 per cent and earnings were up 24 per cent, while contract wins while actively exiting HT&E referral sales to 31 December 2017 were in underperforming contracts, has excess of $2 million. improved the foundation for the business. The advertising From an audience perspective, the business contract for the Hong Kong continued to extend its reach, with 23.8 million Tramways network of shelters, minutes of Emotive content consumed in 2017 which was secured for five years and 53.5 million video views. Of these, 8.3 million and commenced in May 2017, minutes came from 23 million Facebook views, reinforces Cody’s position as a at an average rate of 22 seconds per view. This premium asset quality outdoor is 2.2 times the average for Facebook video, business in Hong Kong. demonstrating how well Emotive’s content is holding viewers’ attention.2 Revenues in the first quarter of 2018 have been encouraging New clients secured in 2017 included Revlon, to date. The business will Danone Murray Goulburn, HelloFresh, Rebel continue to focus on strict Sport, Bonds, Unilever, Western Sydney University cost management and pursue and Champion. Emotive also established external opportunities to return the collaborative partnerships in 2017 for pre-testing operations to profitability. of content, thereby mitigating creative risk and providing the best result for brands. In its third year of operation, Emotive continued to establish itself as one of the leading social video content agencies in the country, being awarded Emerging Agency of the Year at both the 2017 B&T Awards and the 2017 Mumbrella Awards, and the APAC Emerging Agency of the Year at the 2017 Mumbrella Asia Awards. Emotive’s campaign for Berlei, entitled #DoItForYourself and featuring tennis star Serena Williams, was also awarded for Best Use of Multichannel Social Media in Content Marketing at the 2017 Global Content Marketing Awards. 14 HT&E LIMITED SHAREHOLDER REVIEW 2017

Corporate Social Responsibility

HT&E prioritises supporting its people, as well as the diverse communities we connect with every day.

Focusing on our people ARN’s online digital performance management system, ‘EmpowerME’, continued to track employees’ At HT&E, our people are at the heart of all we performance and achievements throughout the year, do. As a results-driven business, we recognise highlighting development needs and opportunities. that the best path to success involves supporting This was supported by a new, all-staff learning and our employees to help us get there. That means development program in 2017, Thrive, with a robust fostering positive work environments and a healthy training schedule, spanning leadership fundamentals, culture across the Group – workplaces that are safe, mental health and resilience, and digital upskilling. inclusive, respectful and rewarding, embracing the experience and potential of each team member. ARN launched a new internship program in 2017 in partnership with Australian Film Television and As set out in the Company’s Diversity Policy, Radio School (AFTRS), giving top-performing students available on the Company website, HT&E believes hands-on experience working alongside ARN’s that a diverse workforce is essential for it to be expert radio talent. Students were provided with able to deliver its strategic objectives and continue highly practical radio experience, working with teams to meet its responsibilities to its customers, its across various areas, including producing, panelling, employees, the communities in which it works, and digital content. and its shareholders. At Adshel, a company-wide learning and While HT&E’s employees predominantly operate in development initiative, Connect to Grow, offered a low-risk environment, with the majority working in communication and sales training sessions, standard office environments, the health and safety development resources, planning tools and online of teams are of the utmost importance. Adshel, the workshops. Adshel launched a bespoke leadership only operation with a significant external workforce, course, The Leadership Connection, to support has recently been recertified under AS/NZ 4801:2001 retention, build capabilities and align behaviours for occupational health and safety systems. with the company purpose. In parallel, Adshel HT&E encourages a healthy work-life balance, invested in a Women in Leadership program to offering flexible work hours, and supporting specifically support the development of high- each business across the Group to implement potential female leaders, including one-on-one initiatives that improve the wellbeing of their coaching and skills workshops to further their teams and build a positive employment culture. careers, while strengthening Adshel’s senior Examples include Adshel providing discounted female talent pipeline. healthcare and a company-funded Wellness The annual Igniting Adshel staff roadshow brought Day, Conversant Media facilitating regular team office-based and field-based teams together from sporting activities, and ARN continuing its ‘ARN across Australia and New Zealand, to reiterate Social’ initiatives to provide positive networking Adshel’s strategy and values, promote cross-cultural and entertainment opportunities. understanding, and offer behavioural training to Attracting and retaining the best employees, with the staff. Each quarter, Adshel also hosted its Most right skills, are crucial to the business. To support Valuable Player Awards, recognising individuals’ this, several training and development programs achievements and contributions. In 2017, Adshel were delivered across HT&E in 2017. 15

We value the opportunity to use the power of HT&E’s audiences and media assets to give a platform to the community and highlight issues that matter. ARN’S Goodness Project In 2017, ARN launched the Goodness Project, a partnership with UnLtd – a foundation bringing together members of the Australian media, marketing and advertising industry to tackle youth disadvantage. ARN committed to support the UnLtd-aligned charities Musicians Making a Difference (MMAD) and batyr, focusing on preventative education in youth mental health. Harnessing the skills and creativity of its people, was shortlisted in the ‘Employer of Choice (100–999 ARN executed ideas to build awareness of employees)’ category at the 2017 Australian HR these charities, raising more than $60,000 Awards and was a finalist for the ‘Employer of the for batyr, and will be supporting MMAD in 2018 with ongoing fundraising. As part of ARN’s Year (over 100 employees)’ at the 2017 B&T Awards. commitment, a charity day was offered to all Across the Group, HT&E is proud to support employees, encouraging them to devote time those at the start of their media careers, through and skills to support these or other community a partnership with the NGEN program – a Media initiatives, providing an ongoing opportunity Federation of Australia initiative to build community for employees to volunteer and raise funds for causes that matter to them. networks and offer workshops to nurture and inspire the newest members of the media industry. Supporting communities, here, there & everywhere HT&E is committed to supporting the communities in which its businesses operate, giving back through partnerships, media inventory, work experience programs, and community engagement opportunities for employees. With its unique combination of radio, outdoor and digital media assets, HT&E has the scale to provide Adshel & Brotherhood of St Laurence valuable support to cause-driven organisations, work experience program and welcomes the opportunity to offer a platform As part of Adshel’s Diversity, Inclusion and to shine a light on important issues and worthwhile Flexibility Program for 2017, Adshel partnered fundraising initiatives. with anti-poverty community organisation, In 2017, HT&E again supported the ASX Thomson Brotherhood of St Laurence (BSL), implementing a work experience program Reuters Charity Foundation, contributing to the share to help disadvantaged youth return to the portfolio for its annual auction. workforce. Six participants joined the Adshel Melbourne operations team for workplace ARN COMMUNITY SERVICE demonstrations and career discussions, with ANNOUNCEMENTS WORTH two participants then spending a week with Adshel to gain practical work experience. To coincide with the program, Adshel ran $3.9m a roadside advertising campaign for BSL in Victoria and the ACT. The ‘Job Hunter Not Dole Bludger’ campaign aimed to challenge the inaccurate and negative stereotypes of young unemployed people, supporting the organisation’s advocacy efforts by shining a light on an important social issue that affects many young people in the community. 16 HT&E LIMITED SHAREHOLDER REVIEW 2017

Corporate Social Responsibility

ARN delivered $3.9 million worth of community partnered with Wellington City Council and the service announcements to promote Australian Urban Art Foundation in a joint community initiative, charities and community initiatives on-air. The The Urban Art Series, using the Adshel Live digital Family Peace Foundation, Mission Australia, The network to bring national art out of galleries and Australian Red Cross, Ovarian Cancer Australia, onto the streets of Wellington. National SIDS Council of Australia, UNICEF Australia, HT&E’s digital publishing business Conversant Sony Foundation Australia, Planet Ark Environmental Media delivered seven campaigns for not-for-profit Foundation, Kidney Health Australia, and Breast organisations in 2017 across its websites, including Cancer Network Australia were among those support for Surf Life Saving Australia and Movember that benefited from charitable campaigns across Foundation. Paid campaigns for the New South ARN’s platforms. Wales Government’s ‘Pretty Shady’ skin cancer ARN continued its support of the Sydney Children’s awareness initiative and the Federal Government Hospital Foundation, with WSFM breakfast radio Department of Health’s anti-tobacco campaign also hosts, Jonesy & Amanda, leading the annual ran across Conversant Media’s assets. Gold Telethon campaign, supported on-air and Conversant brand The Roar launched the Club Roar across digital and social media, and backed by a Awards, an initiative to give back to local sporting significant Adshel outdoor campaign. ARN once clubs and highlight up-and-coming sporting talent, again partnered with Red Nose Day, supporting the by rewarding everyday Australian sports fans with foundation via ARN’s channels, including iHeartRadio a share of $10,000 in prize money for publishing and Little Rockers Radio, to create a dedicated Red videos of their best and worst sporting moments. Nose Day radio station to promote their message Two rounds of Awards ran in 2017, with Club Roar and fundraising initiative, further supported by videos amassing over 28 million total views, and ARN’s on-air talent. enabling brands to integrate with and support Adshel supported not-for-profit organisations grassroots sports. in 2017, providing out-of-home media space for In addition to its organisational sponsorships, 18 campaigns across Australia and New Zealand, HT&E supports its employees in fundraising and equating to over $1 million in media value. Charities volunteering for charitable causes. Adshel’s Together including the McGrath Foundation, SPCA New Giving Back program grants its employees $250 to Zealand, McHappy Day for Ronald McDonald House, donate to their nominated charity, with more than and Red Nose Day were some of the beneficiaries of $20,000 of donations made during the year, as this media support. well as offering an annual charity day to undertake As part of its ongoing partnership with Surf volunteer work in their local communities. In Life Saving New Zealand (SLSNZ), in early 2017 2017, ARN launched the Goodness Project, an Adshel delivered multilingual outdoor creative, to initiative which similarly offers a charity day for reach specific diverse communities with SLSNZ’s ARN employees (refer to previous page). important safety messages. Adshel NZ also 17

ADSHEL MEDIA INVENTORY WORTH OVER $1M SUPPORTING 18 NOT-FOR-PROFIT ORGANISATIONS

Images from left: 97.3FM’s Bianca, Terry and Bob support Red Nose Day; Adshel has pioneered some of the industry’s best recycling programs.

Environmental initiatives and advertising assets, with the dual benefit of reducing sustainable solutions power draw by 80 per cent and better illumination of the product. The combination of this best-in-class HT&E recognises that implementing best practice solar LED technology along with new, improved environmental initiatives is not only good for the battery products, means a bus shelter can be built planet, but also makes good business sense. and powered in a self-sustainable way. More than As a media organisation, we understand our 4,000 of Adshel’s bus shelters now operate with responsibility to demonstrate leadership in this 100 per cent solar energy. space, always complying with relevant legislation and seeking to implement sustainable solutions. Adshel designs its street furniture for a life cycle of at least 20 years, manufacturing to strict standards. Since the demerger of NZME in June 2016 and Adshel has also taken an innovative approach in the sale of HT&E’s regional newspaper business in the treatment of high-volume materials used in December 2016, HT&E’s asset base, range of work the maintenance of its national shelter network, environments and by-products have substantially pioneering some of the industry’s best recycling changed. As a result, HT&E’s environmental impact programs, including a national steel and aluminium would have lessened. recycling program, and a national paper and poster Adshel has a field operations team to maintain its recycling and repurposing program. national network of bus shelters. It produces over Adshel partnered with Suez Australia in 2015 to 350,000 paper posters each year and has specific find a way to reuse shattered safety glass. Together energy usage requirements. Adshel’s environmental they found a solution, repurposing the glass for management system is measured and is certified use in road base construction products, reducing against ISO 14001:2015 for environmental by-product landfill waste disposal. The success of management systems. While Adshel is generally this pilot in the last two years has led to Adshel not regarded to be exposed to climate-related risks extending the project nationally, with a target of that could have a material impact on its operations zero glass waste disposal. and performance, the business remains committed to finding environmentally-sustainable solutions Adshel continues to use purified, chemical-free in its operations. water for shelter cleaning, with a low-voltage and low-pressure system to reduce water consumption Adshel’s environmental management approach and runoff. The cleaning process using this is informed by detailed policies and processes, equipment is also five minutes quicker per shelter, underpinned by a firm commitment from the leading to a significant saving in people power. Executive Leadership Team, who have championed numerous national sustainability and efficiency The business continues to invest in and explore projects. Initiatives include the ongoing installation new ways to minimise energy consumption and of solar-generating solutions in suitable sites, and to reuse and recycle all by-products to help protect a proactive investment in LED lighting systems for the environment. 18 HT&E LIMITED SHAREHOLDER REVIEW 2017

Ciaran Davis (1) Senior CEO & Managing Director, HT&E Ciaran Davis is the CEO & Managing Director of HT&E and responsible for the strategic and Management operational direction of the business. He was promoted to the position in August 2015 from his role as CEO of Australian Radio Network Team (ARN) where he spent five years repositioning the business to become the number one metropolitan radio operator in Australia. Responsible for the recruitment of leading talent to the network and strategic investments such as 96FM and iHeartRadio, Ciaran established a new management team and drove a culture of ambition and success throughout the business. Ciaran joined ARN as CEO in January 2010 from Communicorp Group Ltd in Ireland, where he spent 10 years working in executive leadership roles across the group’s radio and media interests in Europe and the Middle 1. East. Ciaran is also the Chairman of social video content marketing agency Emotive, and is a Board member of Gfinity Australia, Soprano Design, Unbnd Group and The Australian Ireland Fund. Ciaran 2. was appointed as Managing Director of HT&E in August 2016.

Jeff Howard(2) Chief Financial Officer, HT&E Jeff Howard joined HT&E in 2010 and was 3. appointed Chief Financial Officer in December 2012. Jeff spent more than nine years with ABN AMRO and RBS in corporate lending and broader relationship banking roles that included a focus on 4. the telecommunications and media sectors. Prior to this, Jeff was with KPMG where he spent nearly 10 years in audit and project roles, including a secondment to KPMG’s Philadelphia practice. Jeff completed his Executive MBA with the Australian Graduate School of Management in 2005, and is 5. a Graduate of the Australian Institute of Company Directors and a Chartered Accountant. Jeff is a Director of Soprano Design, Gfinity Australia and 6. Unbnd Group, and was previously a Director of Lux Group (formerly Aussie Commerce).

7. 19

Yvette Lamont (3) Rob Atkinson (6) Group General Counsel and Company Secretary, Chief Executive Officer, ARN (from 3 April 2017); HT&E Chief Executive Officer, Adshel (until 3 April 2017) Yvette Lamont has been Group General Counsel Rob Atkinson is Chief Executive Officer (CEO) of ARN, and Company Secretary of HT&E since 1998. She having been appointed in April 2017. Rob joined was previously General Counsel of pay television Adshel in his previous role as CEO in November company Australis Media Limited (Galaxy), a Senior 2011, having previously held the position of Chief Associate with law firm Allens (in the Media and Operating Officer of Clear Channel UK. Rob originally Technology Group) and a solicitor with boutique joined Clear Channel as Sales Director in 2005, law firm Boyd, House & Partners specialising in before being promoted to Group Sales Director and media law. Yvette is a member of the Media and then Managing Director in the same year (2008). Communications Committee of the Law Council Prior to joining Clear Channel, Rob held various of Australia and a Graduate of the Australian senior sales roles at Associated Newspapers in Institute of Company Directors, and has completed both London and Dublin and won the prestigious the Company Meetings and Company Secretarial Campaign Magazine UK Sales Leader of the Year in Practice courses with the Governance Institute 2009. As CEO at Adshel, Rob pioneered the launch of Australia. She is admitted as a solicitor to the of the world’s first national digital street furniture Supreme Court of New South Wales and the High network, as well as the biggest national deployment Court of Australia. of beacons in the world. In the past four years, he has been shortlisted twice, for both Australian CEO Tony Kendall (4) of the Year, and Media Executive of the Year, by the Chief Revenue Officer, HT&E (from 3 April 2017); prestigious CEO Magazine. Chief Executive Officer, ARN (until 3 April 2017) Tony Kendall is Chief Revenue Officer of HT&E, Zac Zavos (7) having been appointed in April 2017. Tony Chief Executive Officer, Conversant Media commenced his previous role as Chief Executive Zac Zavos co-founded Conversant Media in 2007, Officer (CEO) of ARN in December 2015. Tony joined a digital media company that produces engaging ARN from Bauer Media where he spent almost three premium sites that include Australia’s leading sports years as Director of Sales. He joined Bauer in early opinion website, The Roar, the renowned global 2013 from News Corp Australia where he spent over culture website, Lost At E Minor, and the tech and 23 years in senior commercial management roles lifestyle website, Techly. Prior to this, Zac spent nine across Melbourne, Sydney and New York, including years in digital consulting with several firms including a year as the CEO of the Australian magazine IBM (1998 to 2001), Deloitte (2002 and 2003) and division. Tony is also a Director of the Melbourne ThoughtWorks (2005 to 2007). Zac has a Bachelor Fashion Festival (since 2010). of Arts (Psychology & Sociology) and Master of Commerce (Information Systems & Management) Mike Tyquin (5) from The University of New South Wales. Chief Executive Officer, Adshel (from 3 April 2017) Mike Tyquin joined Adshel in May 2014 as Chief Commercial Officer and commenced as Chief Executive Officer (CEO) on 3 April 2017. Over more than 20 years, Mike has held a range of senior executive positions in the out-of-home advertising industry including over nine years at Network Ten’s out-of-home business EYE Corp (EYE). During his time at EYE, Mike led the operations in South East Asia before spending five years as CEO of Australia and New Zealand. Mike is a director of industry bodies OMA (Outdoor Media Association) and MOVE (Measurement of Outdoor Visibility and Exposure). 20 HT&E LIMITED SHAREHOLDER REVIEW 2017

Peter Cosgrove (1) Board Chairman Peter Cosgrove was appointed to the HT&E Board in December 2003. He is the founder of the Buspak of group of companies in Australia, New Zealand and Hong Kong and has more than 20 years’ experience Directors in the broadcasting, publishing and outdoor advertising industries. Peter is Non-executive Chairman of Buspak Hong Kong (since 2003) and Non-executive Deputy Chairman of Clear Media Limited (Director since 2001), which is listed on the Stock Exchange of Hong Kong. Peter was also a Director and is a shareholder of MediaCap Pty Limited. He was previously Chairman of Globecast Australia Pty Limited (2002 to 2015), a broadcasting company based in Sydney. Responsibilities: Non-executive Director, Chairman of the Board of Directors (since 2013) and Chair of Nomination and Governance Committee. 1. Ciaran Davis (2) CEO & Managing Director Refer to biography on page 18. 2. Paul Connolly (3) Non-executive Director BComm, FCA Paul Connolly was appointed to the HT&E Board 3. in October 2012. Paul has 25 years’ experience advising on mergers and acquisitions, takeovers, disposals, fundraisings and initial public offerings. Since 1991, Paul has been Chairman of Connolly 4. Capital Limited, a Dublin-based corporate finance advisory firm focused on the telecom, media and technology sectors. He was a Director of Esat Telecommunications Limited (Esat Telecom), an Irish telecommunications company, from 1997 to 2000, and then a Director of Digicel Limited, a 5. Caribbean-based telecommunications company. In addition, he was a Director of Melita plc from 2007 to 2016. From 1987 to 1991, Paul held the position of Financial Controller of Hibernia Meats 6. Limited and prior to that, he worked with KPMG as an accountant. Paul holds a Bachelor of Commerce degree from University College Dublin, Ireland, and is a Fellow of Chartered Accountants Ireland and a member of Executive Summit at Stanford Graduate School of Business. Currently, Paul serves on the Boards of Communicorp Group and Independent News & Media PLC and is Chairman of Tetrarch Capital Limited, the private Irish media group Business & Finance and UNICEF Ireland. Paul is also an external Senior Advisor to Credit Suisse. Responsibilities: Non-executive Director and Member of Audit & Risk, Remuneration and Nomination and Governance Committees. 21

Peter Cullinane (4) Christine was a Director of Vocus Group Limited Non-executive Director (from August 2017 to November 2017). MBA, MMgt Responsibilities: Non-executive Director and Peter Cullinane was appointed to the HT&E Board in Member of Audit & Risk and Nomination and November 2013. He was the former Chief Operating Governance Committees. Officer of Saatchi & Saatchi Worldwide (1998 to Anne Templeman-Jones (6) 2002) as well as the company’s Chief Executive, Non-executive Director New Zealand and Chairman, Australasia for over BComm (UWA), EMBA (AGSM UNSW), eight years prior. He is a respected force in global MRM (UNSW), CA, FAICD advertising and marketing who brings extensive industry knowledge, as well as expertise in Anne Templeman-Jones was appointed to the HT&E Australasian and global markets, to the Board. Based Board in June 2013. in Auckland, Peter is the founder and Chairman of Anne is an experienced listed company non- Lewis Road Creamery Limited, a fast growing, high- executive director, currently serving on the boards profile, dairy-based packaged goods business. He of GUD Holdings Limited, Citadel Group Limited is a Director of NZME Limited (and was appointed (since September 2017), WorleyParsons Limited Chairman in December 2017), a retired Director of (since November 2017) and Cuscal Limited, and the WPP AUNZ Limited (2010 to 2016) and a retired Chairman of the Commonwealth Bank’s financial Director of SKYCITY Entertainment Group (2008 to advice companies. Anne was formerly a director of 2015), where he was Chairman of the Corporate and Pioneer Credit Limited, TAL Superannuation Fund, Social Responsibility Committee and a member of Notre Dame University and HBF’s private health and the Governance and Nominations Committee. general insurance companies. Responsibilities: Non-executive Director and Anne had a 30-year executive career developing Chair of Remuneration Committee. deep operational, risk, governance and strategy Christine Holman (5) experience. Early in her career she held audit and Non-executive Director accounting roles with PricewaterhouseCoopers MBA, GAICD working in Australia and overseas. She gained experience in corporate banking with Bank of Christine Holman was appointed to the HT&E Singapore (OCBC Bank) and then Westpac Banking Board in November 2015 and brings a strong Corporation, and in private banking with Australia understanding of digital media and technology with and New Zealand Banking Group. Anne returned to over 20 years’ experience across the technology, Westpac in 2007 and went on to hold various senior private equity and digital sectors in a variety of management positions in private banking, risk and functions including finance, commercial, technology strategy until 2013. Her depth of experience has and marketing. enabled her to serve as a Chair or member of audit Christine was formerly the Commercial Director and risk committees on current and past boards. at Telstra Broadcast Services and was a member Responsibilities: Non-executive Director, of their Executive and Remuneration Committees. Chair of Audit & Risk Committee and Member Christine joined Telstra (as a result of its acquisition of Remuneration Committee. of Globecast Australia) where she was the Chief Financial Officer and Commercial Director. Christine spent seven years at Capital Investment Group assisting management and the boards of investee companies on strategy, business development and mergers and acquisitions. She has an MBA from Macquarie University and a Post Graduate Diploma in Management from Macquarie University and is a Graduate of the Australian Institute of Company Directors. Christine is a Non-executive Director of CSR Limited and The Bradman Foundation. Christine is also a Non-executive Director of the State Library of NSW Foundation (since February 2017) and T20 World Cup 2020 Cricket Board (since January 2018). 22 HT&E LIMITED SHAREHOLDER REVIEW 2017

Five Year Financial History

The below reflects the operations of the Group and should be read in conjunction with the 2017 financial statements, together with the accompanying notes. Certain comparative financial information for 2017 has been restated for the share consolidation and the bonus element included in the 2016 equity raisings. The Balance Sheet at 31 December 2016 does not include the assets and liabilities of the entities divested as part of the demerger of NZME and the entities disposed as part of the ARM sale. It does include the assets and liabilities acquired as part of the purchase of the remaining 50 per cent of Adshel and the acquisition of Conversant Media. Equity for 2016 was impacted by the demerger of NZME and equity raisings. Several financial measures are used by the Group to monitor financial performance against the overall strategy, including profit after taxation attributable to members for the parent entity and underlying EBITDA.

2017 2016 2015 2014 2013 $’m $’m $’m $’m $’m Income statement Total revenue1 472 658 850 843 817 EBITDA2 118 91 166 164 163 Depreciation and amortisation 38 8 35 33 33 EBIT3 80 83 131 131 130 Net interest expense 9 18 32 36 33 Adjusted net profit4 43 63 70 75 60 Statutory net profit/(loss) (117) (6) (10) 11 3 NPATA 5 54 66 78 81 64

Balance sheet Equity excluding non-controlling interests 586 801 426 434 359 Total assets 1,028 1,145 1,134 1,129 1,255 Total borrowings 134 163 477 497 457 Net debt 115 143 456 458 437

Statistical analysis EBITDA/total revenue1 25.1% 20.0% 19.6% 19.3% 18.5% Net debt/EBITDA (times) 1.0 1.2 2.7 2.8 2.7 Interest cover based on EBITDA (times) 14.9 9.8 5.2 4.5 4.9 Basic earnings per share (cents)6 13.9 31.4 44.4 49.5 50.2 Basic earnings per share based on NPATA (cents)6 17.6 33.1 49.5 53.8 54.2 Dividend per share (cents) 7.0 4.0 – – – Dividend payout ratio7 50% 13% 0% 0% 0% ROIC8 13.4% 9.6% 17.3% 17.2% 19.1% No. of shares on issue (‘000) 308,912 307,494 1,029,041 1,029,041 661,527 No. of shareholders9 6,449 6,640 6,818 7,166 8,270 Market capitalisation ($’m) 581 873 545 859 298 Market price per share at 31 December $1.88 $2.84 $0.53 $0.83 $0.45

(1) Total revenue including discontinued operations. (2) Earnings before interest, tax, depreciation and amortisation from continuing operations and before exceptional items. (3) Earnings before interest and tax from continuing operations and before exceptional items. (4) Net profit attributable to owners of the parent entity after tax and before exceptional items. (5) Net adjusted profit after tax before amortisation and exceptional items. (6) Earnings per share are before exceptional items. Comparative EPS has been restated for the share consolidation and the bonus element included in the 2016 equity raisings. (7) Before exceptional items. (8) Earnings before interest, tax and depreciation from continuing operations before exceptional items. (9) As at 31 December. 23

Corporate Directory

HT&E LIMITED AUDITORS ABN 95 008 637 643 PricewaterhouseCoopers One International Towers Sydney DIRECTORS Watermans Quay Peter Cosgrove (Chairman) BARANGAROO NSW 2000 Paul Connolly Peter Cullinane PRINCIPAL BANKERS Christine Holman Australia and New Zealand Banking Group Anne Templeman-Jones Bank of China Ciaran Davis (CEO & Managing Director) Commonwealth Bank of Australia COMPANY SECRETARY Credit Suisse Yvette Lamont HSBC J.P. Morgan Chase Bank REGISTERED OFFICE National Australia Bank Level 4, 100 William Street State Bank of India SYDNEY NSW 2011 Sumitomo Mitsui Banking Corporation Telephone: +61 2 9333 4999 Westpac Banking Corporation Facsimile: +61 2 9333 4900

SHARE REGISTRY Link Market Services Limited Level 12, 680 George Street SYDNEY NSW 2000 Locked Bag A14 SYDNEY SOUTH NSW 1235 Telephone (Australia) 1300 553 550 (International) +61 1300 553 550 Fax (Australia) 02 9287 0303 (International) +61 2 9287 0303 Email [email protected] Website www.linkmarketservices.com.au Notice is given that the Annual General Meeting of HT&E Limited will be held at PricewaterhouseCoopers Level 17, One International Towers Sydney Watermans Quay Barangaroo NSW 2000 on Monday, 7 May 2018 at 10:00am www.htande.com.au